For the supply of goods, it is necessary to consider the occurrence of various transactions related to the supply to determine the supply time. The following are the dates that need to be considered when the VAT liability arises.

Commodity supply time

The earliest below

Date of transfer of goods The date of transfer of goods, if such transfer is carried out under the supervision of the supplier. If not under the supervision of the supplier, the date is the date when the consignee took possession of the goods

Payment receipt date This means that you have received the payment date for taxable supplies, which also includes advance receipts.

The date of the tax invoice The date the tax invoice was issued. The last date for issuing an invoice is within 14 days from the date of supply.

As stated in the table above, the earliest occurrence of any of the above dates will be considered as the supply time. If you observe carefully, the date of transfer of the goods is distinguished according to the “supplier supervision”. Based on this, the arrival date of the transferred goods is different.

If the goods are transferred under the supervision of the supplier, the date of transfer will be regarded as the time of supply.

For example, A-One Spare Ltd in Dubai provided spare parts to Speed ​​Motors Ltd in Sharjah, UAE. A-One Spare Ltd delivers the goods to Speed ​​Motors Ltd’s factory door. Until the goods arrive in front of Speed ​​Motors Ltd’s factory, all risks and responsibilities shall be borne by A-One Spare Ltd. In this example, it is clearly stipulated that the goods are transferred under the supervision of the supplier, A-One Spares Ltd.. Therefore, the transfer date can be applied when it reaches the supply.

If the transfer of the goods is not under the supervision of the supplier, the date when the consignee takes possession of the goods will be regarded as the time of supply.

For example, A-One Spare Ltd provided spare parts from its factory gate to Speed ​​Motors Ltd in Sharjah, UAE. In other words, Speed ​​Motors Ltd took the goods from A-One Spare Ltd.’s factory direct sales office. Here, the goods have not been transferred under the supervision of the supplier, and the consignee, namely the date that Speed ​​Motors Ltd took possession of the goods, has not been transferred. The goods will arrive at the time of delivery.

Let us use examples to understand the timing of commodity supply considering different business scenarios.

Examples of product supply times

Note: In order to understand the supply time, in the following example, we consider the monthly and quarterly VAT refund period (Jan-Mar’18).

Situation-1

Invoice date, delivery date, receipt date, payment date, return time (period when reporting and VAT payment are required)

March 20, 2018 April 5, 2018 April 10, 2018 March 20, 2018 2018 Monthly Quarter

March 18 January March 18

In the above case, the delivery time is March 20, 2018. The reason is that the earliest delivery date is:

1. Date of transfer

2. Invoice date

3. Date of receipt

In this case, the invoice date is earlier than the transfer date and the receipt date. Therefore, if it is a quarterly return, you need to report and pay the output value-added tax from January to March 2018, and if it is a monthly return, you need to report March 2018.

Scene-2

Invoice date, delivery date, receipt date, payment date, return period (period when reporting and VAT payment are required)

April 10, 2018 April 15, 2018 March 15, 2018 March 15, 2018 2018 Monthly Quarter

March 18 January March 18

In the above case, the delivery time is March 15, 2018. The reason is that the earliest delivery time is:

1. Date of transfer

2. Invoice date

3. Date of receipt

In this case, the payment date is earlier than the invoice date and the delivery date of the goods.

Scene-3

Invoice date, delivery date, receipt date, payment date, return period (period when reporting and VAT payment are required)

April 1, 2018 March 25, 2018 April 10, 2018 March 25, 2018 2018 Monthly Quarter

March 18th-January-March 18th *The goods have been delivered to the recipient’s residence.

In the above circumstances, the fact that the goods were delivered at the location of the consignee means that the goods were transferred under the supervision of the supplier. Therefore, the earliest actual transfer date, invoice date and payment receipt date will be the supply date. In this case, the transfer date is earlier than other dates, and the supply time will be March 25, 2018.

Scene-4

Invoice date, delivery date, receipt date, payment date, return period (period when reporting and VAT payment are required)

April 1, 2018 March 25, 2018 April 10, 2018 March 25, 2018 2018 Monthly Quarter

March 18-March 18, 2018 *The goods have been delivered to the recipient at the supplier’s factory exit.

In the above circumstances, the fact that the goods are delivered to the customer at the supplier’s factory exit means that the goods are not transferred under the supplier’s supervision. In this case, the date of possession of the goods by the consignee should be considered when receiving the goods.

In this case, the earliest date of receipt is when the consignee owns the goods, the date of the invoice and the receipt of payment. Therefore, the delivery time is March 25, 2018.

in conclusion

It is important for every taxable supplier to understand the concept of supply time and how it is determined. First, the taxable supplier needs to search the facts of each supply to determine which clause in the supply time applies. Second, he needs to determine the date specified by the regulation. Correctly determining the delivery time helps you to report VAT liability within the appropriate VAT refund period and avoid cash flow restrictions or fines due to incorrect determination.